What is Ethereum Classic? The DAO, DApps and The Hard Fork

What is Ethereum Classic?

The DAO, DApps and The Hard Fork

Born out of a hack and a philosophical disagreement in the Ethereum community, Ethereum Classic has become one of the top cryptocurrencies on the market.

Starting life as Ethereum, Ethereum Classic (and its value token, ETC) is the result of a long debate over how cryptocurrencies should handle disagreements within the community and data hacks. That does not mean it’s in any way a lesser entity than Ethereum. On the contrary, the community behind Ethereum Classic aims to make Ethereum Classic the best cryptocurrency on the market.

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What is Ethereum Classic?

Ethereum Classic is an open-source, peer-to-peer, computing platform based on blockchain technology and the original Ethereum code. Just like Ethereum, it provides a value token, or “altcoin”, called “classic ether” which is used to pay users for products and services, and as a transaction fee when using decentralized apps and smart contracts.

Icon

Symbol

Initial release date

Algorithm type

Max. supply

ETC

30 July, 2015

SHA3

210-230 million ETC

The story behind The DAO attack and subsequent hard fork

decentralized autonomous organizationbuilt on the Ethereum platform. It was meant to allow users to invest in the development of decentralized apps to run on the Ethereum blockchain.By May 2016, The DAO had accumulated over $150 million, and was ready to begin its operations. Then a paper was released detailing a security flaw in the DAO architecture. Developers of The DAO ignored the concerns raised and moved forward with their operations.

In June 2016, The DAO was hacked using the same security flaws outlined in the paper and approximately $50 million were stolen.

This hack and the debate that followed it caused a schism in the Ethereum community. On one hand, Ethereum developers could revert the hack back, returning all Ether coins to their respective owners. On the other hand, the very core philosophy of cryptocurrency is that the transactions cannot be edited and cannot be deleted.

As a result, Ethereum underwent a hard fork, copying and modifying the main code to revert the DAO hack. Meanwhile, the main code remained as is, and the community began calling it “Ethereum Classic”. Since then, Ethereum and Ethereum Classic have been operating as separate coins while sharing the same goals and vision: to become the world’s first decentralized computing platform.

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How is Ethereum Classic different from bitcoin?

As a platform, Ethereum Classic aims to take advantage of the incredible power behind bitcoin’s blockchain technology. While the developers of bitcoin restricted the blockchain to only compute currency transactions, Ethereum Classic, like Ethereum, aims to build a decentralized computing system on top of the blockchain.

Decentralized Applications

The core goal and vision of Ethereum remains in Ethereum Classic. The aim is to build a blockchain platform that allows software developers to build applications whose databases and transactions are stored, not on a single server owned by a specific company, but on all nodes and users connected to the Ethereum Classic blockchain.

Centralized vs decentralized data

Most of everything you use on the Internet today uses a centralized database system, i.e. the database is stored on a single server. While the server itself might be a collection of different machines working in tandem, the database itself is still in a central location. If a hacker were to hack into the server and change some of the information on the database (say, giving himself or herself an extra $5 million), there would be no way to validate the changed data.

To mitigate this, most reputable companies maintain one or more backups of their data. That way, if something doesn’t look right, they can compare the live database with any of the backups and notice (and revert) the discrepancy.

Decentralized apps on the Ethereum and Ethereum Classic platform share their database transactions with every user on the blockchain. Because there is now no central location in which the database resides, hackers would need to hack the databases of 51% of all users on the blockchain to be able to convince everyone that they have that extra $5 million.

Where can I use ETC?

As of September 2017, ETC has yet to gain the widespread acceptance of its parent currency ETH. After the hard fork, the majority of merchants and market movers followed Ethereum, leaving Ethereum Classic at a disadvantage.

Nevertheless, ETC can be purchased on many online currency exchanges, and it can be held as both an investment and as a way to increase the value of Ethereum Classic in the eyes of merchants and service providers.

How do I invest in Ethereum Classic?

Investing in Ethereum Classic is as simple as buying and holding some Classic Ether. As more users buy and use ETC, and developers build more decentralized apps for the Ethereum Classic blockchain, more confidence might be instilled in the platform and as a result the value and price of the coin would be more likely to rise.

2017 has seen huge growth for all cryptocurrencies, and ETC is no different. From $1.40/ETC on 1 March 2017…

it rose to $23.01 by 20 June, 2017.

Unfortunately, the price of ETC decreased drastically in September 2017, down to $7.69/ETC, so the future of the platform remains uncertain.

Using Ethereum Classic to transfer money

Classic Ether (ETC), like other altcoins, is very simple to use once you have an Ethereum Classic compatible wallet installed. You just need to take a few steps:

Install an Ethereum Classic wallet. Wallets that can access the Ethereum Classic blockchain are often able to access the Ethereum blockchain as well. Make sure you set it up correctly or you might end up sending ETC to the wrong user.

Get the recipient’s wallet address. The recipient of ETC will give you a public key address, either as a string of numbers and letters, or as a QR code which you can scan with your phone.

Enter the value to send. After agreeing upon an amount to send, enter the value of ETC into your wallet, ensuring that you have the required amount of funds available.

Send the money. After pressing “Send” (or the equivalent button in your wallet), the ETC amount will be deducted from your wallet and added to the recipient’s. The transaction should appear immediately, but it might take about a minute to verify completely.

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